Failure to List Legal Malpractice Lawsuit as an Asset In a Bankruptcy Leads to Dismissal of Lawsuit
In a recent article in the Chicago Daily Law Bulletin a decision by the Illinois Appellate Court was discussed dealing with the failure to schedule legal malpractice claims in a bankruptcy proceeding According to the article, a couple of weeks ago the Illinois Appellate Court dismissed a couple's legal-malpractice lawsuit based on a lack of standing because of their failure to list the cause of action as an asset during their bankruptcy proceeding. The Court wrote that when a debtor files a bankruptcy petition, he must file a schedule of assets and liabilities, including any cause of action that accrued prior to the bankruptcy filing. A trustee is then assigned to handle the debtor's property , with the trustee having the exclusive right to pursue the causes of action listed in the bankruptcy schedule. The Court further explains that a trustee can abandon a scheduled asset, but if an asset is not properly scheduled (like in the present case) it is not abandoned when the bankruptcy case is closed. Consequently, if a legal malpractice action is unscheduled in the client's bankruptcy the claim remains the asset of the bankruptcy estate (not the client) even after the bankruptcy case is closed.
Failure to List Legal Malpractice Lawsuit as an Asset In a Bankruptcy Leads to Dismissal of Lawsuit
***Note This page is an Archieve of Publicly released information either through our company or another Press Release organization. We do not "fact check", "Support", nor "Dispute" any of the information provided to us. We are a distribution point and Historical press release research and search service. This information only represents the fact that at one point in time the release was distributed to 1000's of publications both online and off. PRNewsNow will not take sides in any personal or commercial disputes you have with the writer of this press release. We will defend its right to exist blindly and without regards to its political, commercial or personal implications.***
